Is the Arbitration Provision in Your Employment Contract Enforceable?
As an employer, you may contemplate requiring any
employment related disputes to be arbitrated in order to avoid
the risk of facing a jury trial of an employee’s claim.
However
the courts have long held that one-sided arbitration provisions
are not enforceable. There are five minimum requirements for
mandatory employment arbitration provisions: (1) neutral
arbitrators, (2) more than minimal discovery (the opportunity to
view relevant documents, depose witnesses, etc.), (3)
requirement of a written award, (4) provision for all types of
relief that could be available in court, and (5) provision that
the employee does not have to pay any unreasonable costs or any
arbitrator’s fees.
Likewise, provisions in such employment
agreements which grant the arbitrator the power to decide if the
contract is enforceable have been held to be unenforceable.
Arbitration agreements can be very useful to an employer.
However, they must be carefully and fairly drafted to be
enforceable.
